Under Florida contract law, however, courts generally will not rewrite the terms of a contract. Although Florida statutory law allows courts to modify overbroad non-competition covenants, Florida courts have otherwise refrained from rewriting non-competition covenants.

In Advantage Digital Sys. v. Digital Imaging Servs., 870 So. 2d 111 (Fla. 2d DCA 2003), two employees were bound by non-competition covenants that restricted them from “soliciting” the employer’s customers. The trial court found the non-competition covenants enforceable and ordered that the employees were prohibited from “having any contact, whatsoever, with any customers of [the employer].” Advantage Digital Sys., 870 So. 2d at 114-15. On appeal, the appellate court disagreed with the trial court’s order. The appellate court held that the trial court’s order went “far beyond prohibiting solicitation” and “essentially and impermissibly rewrites the parties’ agreements by disallowing any ‘contact’ with [the employer’s] customer. … Because the noncompetition agreements prohibit only solicitation, that is the only activity that can be the subject” of the court’s order. Advantage Digital Sys., 870 So. 2d at 115.

More recently, in Heiderich v. Fla. Equine Veterinary Servs., 86 So. 3d 527, 530 (Fla. 5th DCA 2012), Dr. Heiderich, a veterinarian, signed a non-competition covenant with her employer, which restricted her from owning or being employed by any veterinary practice located within a 30-mile radius of the employer’s place of business. After ending her employment, Dr. Heiderich started her own veterinarian practice outside the 30-mile radius of the non-competition covenant. However, Dr. Heiderich delivered her veterinarian services to customers within the 30 mile radius. The former employer sued to enforce the non-competition covenant and argued that the covenant prohibited Dr. Heiderich from “practicing” veterinarian services within the 30-mile radius. While the trial court agreed with the employer, the appellate court disagreed.

The appellate court in Heiderich held that the non-competition covenant restricted Dr. Heiderich only from owning or being employed by a veterinarian practice located within the 30-mile radius; it did not restrict her from practicing veterinarian services within the 30-mile radius. Because Dr. Heiderich opened her business outside the 30-mile radius, she did not breach the non-competition covenant.

As discussed in a previous article, Florida law requires that courts read non-competition covenants in favor of providing reasonable protection to a company’s legitimate business interests. However, as the above cases demonstrate, Florida courts generally will not grant protection beyond what the terms of a non-competition covenant provide.

Peter T. Mavrick has successfully represented many businesses in trade secret and non-competition covenant litigation. This article is not a substitute for legal advice tailored to a particular situation. Peter T. Mavrick can be reached at: Website: www.mavricklaw.com; Telephone: 954-564-2246; Address: 1620 West Oakland Park Boulevard, Suite 300, Fort Lauderdale, Florida 33311; Email: peter@mavricklaw.com.

For those reasons, companies might wish to take advantage of Florida’s non-competition laws even when the non-competition contract will be enforced outside of Florida. In those situations, companies will likely include a “choice of law” provision in their non-competition covenants. Generally, a “choice of law” contractual provision allows the parties to decide which state’s laws should apply to the contract.

Consider the following example: A Florida corporation conducts business in New York. To protect its legitimate business interests, the Florida corporation enters into a non-competition contract with its New York employee. However, New York’s laws do not favor non-competition covenants to the same extent that Florida’s laws do. New York law requires courts to consider whether the non-competition contract would impose undue hardship on the employee, a consideration that is forbidden under Florida law. To take advantage of the Florida law, the Florida corporation includes a “choice of law” provision in the non-competition contract stating that Florida law shall apply to the contract. That is exactly what a Florida corporation did in Brown & Brown, Inc. v Johnson, 980 N.Y.S.2d 631, 637 (N.Y. App. Div. 4th Dep’t 2014). The New York appellate court, however, found that New York law, not Florida law, applied to the non-competition contract notwithstanding the contract’s “choice of law” provision.

Under New York law, a “choice of law” provision will be upheld if it bears a reasonable relationship to the parties or the transaction and if it is not “truly obnoxious” to New York’s public policy. Considering New York’s public policy, the court in Brown & Brown, Inc. refused to uphold the “choice of law” provision and held that New York law will apply to the non-competition contract. Specifically, the New York court found that “Florida law prohibiting courts from considering the hardship imposed on the person against whom enforcement is sought is ‘truly obnoxious’ to New York public policy.” Brown & Brown, Inc., 980 N.Y.S.2d at 638.

New York was not the first state to find that Florida non-competition law was contrary to the respective state’s public policy. In 2012, a Georgia appellate court found that “applying Florida law, the [the non-competition] covenants would almost certainly be upheld, despite the fact that they violate applicable Georgia law.” Carson v. Obor Holding Co., LLC, 318 Ga. App. 645, 654 (Ga. Ct. App. 2012). Consequently, the Georgia court held that the non-competition contract’s forum-selection clause selecting Florida as the forum state was unenforceable because Florida non-competition law was against Georgia public policy.

Likewise in 2008, an Illinois appellate court found that “Florida law, which specifically prohibits considering the hardship a restrictive covenant imposes upon an individual employee, is contrary to Illinois’s fundamental public policy.” Brown & Brown, Inc. v. Mudron, 379 Ill. App. 3d 724, 728 (Ill. App. Ct. 3d Dist. 2008). The Illinois appellate court therefore found that Illinois law applied to the non-competition contract despite the contract’s “choice of law” provision. In 2001, a federal court in Alabama also refused to uphold a “choice of law” provision in a non-competition contract because it found that Florida non-competition law was “antithetical to Alabama’s general policy against covenants not to compete.” Unisource Worldwide, Inc. v. S. Cent. Ala. Supply, LLC, 199 F. Supp. 2d 1194, 1201 (M.D. Ala. 2001).

As the above cases show, Florida companies seeking to enforce a non-competition covenant outside of Florida might not be able to take advantage of Florida’s non-competition laws even with a choice of law provision. Because a choice of law provision cannot guaranty that Florida law will apply outside of Florida, proper drafting of the non-competition contract is key in those situations.

Peter T. Mavrick has successfully represented many businesses in trade secret and non-competition covenant litigation. This article is not a substitute for legal advice tailored to a particular situation. Peter T. Mavrick can be reached at: Website: www.mavricklaw.com; Telephone: 954-564-2246; Address: 1620 West Oakland Park Boulevard, Suite 300, Fort Lauderdale, Florida 33311; Email: peter@mavricklaw.com.

If the non-competition provision of an employment contract is considered “independent,” then the employer’s breach of the employment contract will not affect the non-competition covenant’s enforceability. Essentially, the independent non-competition covenant will be considered a separate contract. A Florida district court recently shed some light on what contractual language would suffice to render a non-competition covenant “independent.”

In Richland Towers v. Denton, 2014 Fla. App. LEXIS 3472 (Fla. 2d DCA Mar. 12, 2014), an employer, Richland Towers, sued to enforce its non-competition covenants with two former employees who started a competing business. Richland Towers, however, failed to pay those employees certain bonuses that were required under the employment contract. The trial court found that Richland Towers’ failure to pay the contractually required bonuses constituted a prior material breach that essentially destroyed the entire employment contract and released the employees from the non-competition covenant. The appellate court disagreed.

The appellate court held that the following two provision in the employment contracts rendered the non-competition covenants “independent”: (1) “Each restrictive covenant … shall be construed as a covenant independent of any other covenant”; and (2) “the existence of any claim or cause of action by the Employee against the Corporation … shall not constitute a defense to the enforcement by the Corporation of any other covenant.” According to the appellate court, those two provisions made the non-competition covenants “independent.”

Every case is different, and a court’s construction of contractual terms depends on many factors. However, as the court in Richland Towers found, if an employment contract contains express provisions that (1) the non-competition covenant is independent of other provisions and that (2) an employee’s claims against the employer will not constitute a defense to the enforcement of the non-competition covenant, then the non-competition covenant will likely be considered “independent.”

Peter T. Mavrick represents clients in non compete agreement cases in Fort Lauderdale, Palm Beach, and Miami Dade. This article is not a substitute for legal advice tailored to a particular situation. Peter T. Mavrick can be reached at: Website: www.mavricklaw.com; Telephone: 954-564-2246; Address: 1620 West Oakland Park Boulevard, Suite 300, Fort Lauderdale, Florida 33311; Email: peter@mavricklaw.com.